Transport

This is the fifth in this year’s job market series.
By 2050, 2.5 billion people will move into cities with the vast majority doing so in the developing world (United Nations 2014). This has the potential to lift millions out of poverty by increasing the productivity of firms and workers who benefit from agglomeration. However, rapid and unplanned growth can lead to sprawling, inefficient cities with hours wasted stuck in traffic. Governments will spend vast sums on mass transit systems to reduce commute times (McKinsey 2016), but measuring their benefits is challenging. While individuals save time on any particular commute, their decisions of where to live and work will change as new alternatives become attractive and land and labor markets adjust. The lack of detailed intra-city data in less developed countries coinciding with the construction of large transit systems makes evaluating their causal impact even more daunting.

In my job market paper, I ask the question: how large are the economic gains to improving public transit within cities and how are they distributed between low- and high-skilled workers? I construct detailed data across 2,800 census tracts from before and after the opening of the world’s largest Bus Rapid Transit (BRT) system–TransMilenio–in Bogotá, Colombia. I develop a new reduced form methodology derived from general equilibrium theory to empirically assess TransMilenio’s impact on city structure and use this framework to quantify its aggregate and distributional effects.

NEUDC is a large development economics conference, with more than 160 papers on the program, so it’s a nice way to get a sense of new research in the field.
Thankfully, since NEUDC posts submitted papers, I was able to mostly catch up. I went through 147 of the papers and summarized them below, by topic. If a paper you loved or presented isn’t in the rundown, feel free to add a brief summary in the comments. (Why 147 instead of 160? I skipped a few macro papers and the papers that weren’t posted.)

This is the sixth in our series of posts by students on the job market this year.
The productivity of workers in agriculture is generally much lower than in other sectors of the economy (Gollin, Lagakos and Waugh, 2014). This is particularly true in low-income countries, yet these countries generally have the highest shares of the population living in rural areas and working in agriculture (McMillan et al, 2014). So why don’t workers switch jobs into higher productivity (and better paid) occupations? Development economists as far back as Lewis (1954) and Sen (1966) have studied the labor market imperfections that may keep workers in low productivity agriculture despite higher wages elsewhere.

This is the third in our series of posts by students on the job market this year.Puzzling Results:
Economists tend to believe that travel and trade costs reduce welfare. Trade papers like Irwin (2005), Redding & Sturm (2008), Storeygard (2014), and Etkes & Zimring (2014) draw on evidence from the United States, West Germany, sub-Saharan Africa, and the Gaza Strip to support this idea. One might reasonably expect, therefore, that the welfare of Palestinian commuters declined during the Second Palestinian Uprising (2000-2007), when the Israeli army deployed hundreds of roadblocks and checkpoints along the West Bank’s internal road network in order to defend Israeli civilian settlements. Although these obstacles were intended to deter and intercept militants, they had the unintended consequence of delaying Palestinian civilian travel between Palestinian towns, and from Palestinian towns to Israel (B’Tselem (2007), World Bank (2007)). Two World Bank working papers (Cali & Miaari (2014), van der Weide et al (2014)) take advantage of this ‘natural experiment’ to study the effects of travel costs on commuters’ welfare, finding that economic outcomes of Palestinians declined in the face of obstacle deployment. My job market paper, however, finds a very different result: while obstacles reduced the welfare of laborers in some towns, laborers from other towns actually benefited from obstacles. The salient outcome of obstacle deployment was not welfare reduction, but rather welfare inequality.

I was recently invited to speak at the biannual infrastructure retreat of the IADB and was excited to learn that they had decided to devote two days of their retreat to discussing the development of an impact evaluation (IE) program in the transport sector. This is largest sector in most development banks, yet one that has not caught the IE bug. Perhaps this is because there is a perception that IE is difficult or impossible to incorporate into transportation projects.

In the 1960s, black and white individuals in the United States had radically different labor market outcomes. In 1962, the unemployment rate for African-Americans was 13 percent while it was only 6 percent for whites. Fifty years have passed, enough time for Martin Luther King to go from movement leader to monument, but as of 2010, the unemployment rate in the U.S.